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Ethereum Failed to Surge Despite Pectra's Live Event

Despite the profitable execution of the Pectra upgrade, the market reaction has been underwhelming, with the ETH price climbing just a minimal 5%.

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Despite the successful execution of the Pectra upgrade, the market's reaction has been surprisingly...
Despite the successful execution of the Pectra upgrade, the market's reaction has been surprisingly moderate, with Ethereum's price rising by just 5%.

Ethereum Failed to Surge Despite Pectra's Live Event

Rewritten Article:

ETH Prices Falter Following Pectra Upgrade: Here's Why

The recent implementation of Ethereum's Pectra upgrade on May 7 fetched a lukewarm response from the market, as the ETH price only managed a meager 5% increase. But what's holding back Ethereum from reaching new highs?

Despite the Pectra upgrade, Ethereum's growth has been lackluster. On the day of the upgrade, ETH opened at $1,849 and closed at $1,811, recording a slight 2% decline. At the time of writing, ETH is trading at $1,936, marking only a 5% gain from its opening price on May 7.

Several factors are contributing to Ethereum's underwhelming market response. One major factor is the macroeconomic climate, particularly the ongoing uncertainty surrounding global trade due to the escalating tariff war. However, Ethereum's struggles predate these recent market risks. In recent months, ETH has consistently lagged the broader crypto market, failing to keep pace with other layer 1s in terms of user growth.

From July 2023 to April 2025, Ethereum's active addresses—a key indicator of network utility and user growth—have been remarkably inconsistent. They range between 400,000 and 600,000, a stark contrast to competitors like Tron (TRX) and Ton (TON), which have surged beyond 2.5K and 3.6K active addresses, respectively. Tron and Ton have outperformed Ethereum in terms of user activity, which could indicate increased demand for their platforms.

While Ethereum leads in Total Value Locked, which currently stands at $52.6 billion, this figure suggests trust from institutional players in Ethereum's security and long-term viability. However, the low number of active addresses signals reduced demand from retail investors, a key driver behind bull runs.

On the technology front, the Pectra upgrade brought meaningful improvements, such as lower blob fees and enhanced wallet usability. But these advancements do not address the main barrier to user growth: the difficulty of bridging assets and data across Ethereum's fragmented Layer 2 ecosystem.

Investors are likely seeking clear evidence of expanding network adoption in the form of increasing user growth. Bridging technology is critical for facilitating this growth by making it easier for users to access and engage with Ethereum's ecosystem.

Insights from Enrichment Data

  • Ethereum's Fee Revenue and Inflation: The Pectra upgrade led to a significant reduction in transaction fees for Layer-2 scaling solutions, but the decreased fee revenue can make Ethereum inflationary rather than deflationary. This change undermines one key factor driving ETH's price appreciation: the scarcity of ETH and fee revenue.
  • ** Technical Indicators:** Ethereum's price movement is influenced by technical indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence/Divergence (MACD), which suggest bearish momentum and potential downside risk.
  • Declining Trading Volume and Retail Interest: Lower trading volume on exchanges like Coinbase, despite higher overall market volumes, points to reduced retail engagement with ETH, which can weaken price support.
  • Cooling Off of Big Investors and a Quieting Network: Large investors are reportedly less active, and network activity has slowed down, which may factor into Ethereum's price underperformance.

In summary, Ethereum's underperformance in the wake of the Pectra upgrade can be attributed to reduced fee revenue, bearish technical indicators, declining retail and investor interest, and a quieter network environment. To win back investors and achieve sustainable growth, Ethereum needs to address the challenges surrounding asset and data bridging within its Layer 2 ecosystem.

  1. Ethereum's faltering prices after Pectra upgrade may be due to a decline in fee revenue, making ETH inflationary instead of deflationary, which undermines its price appreciation.
  2. The recent underperformance of Ethereum can also be linked to bearish technical indicators, such as the Relative Strength Index (RSI) and the Moving Average Convergence/Divergence (MACD), hinting at potential downside risk.
  3. Lower trading volumes on exchanges like Coinbase, despite higher overall market volumes, indicate reduced retail engagement with ETH, weakening price support.
  4. Large investors are reportedly less active, and network activity has slowed down, which may contribute to Ethereum's price underperformance.
  5. Despite the introduction of Pectra, Ethereum has struggled to maintain growth, as it consistently lags behind other layer 1s in terms of user growth and active addresses.
  6. Tron (TRX) and Ton (TON) have surpassed Ethereum in terms of user activity, which suggests increased demand for their platforms, impacting Ethereum's market response.
  7. Ethereum's Total Value Locked currently stands at $52.6 billion but has a low number of active addresses, signaling reduced demand from retail investors.
  8. To win back investors and achieve sustainable growth, Ethereum needs to focus on facilitating asset and data bridging within its Layer 2 ecosystem to increase user growth and network adoption.

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